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NEW DELHI : A joint report by TransUnion CIBIL and Google, titled Credit Distributed released on Thursday provides trends and insights on the increasing reliance of consumers on the internet for purchasing credit products, a shift led by the unprecedented rise in digital adoption by consumers in recent times. The report combines the power of data based on credit-related searches on Google along with TransUnion CIBIL’s credit information insights.

Signalling a shift from traditional channels to online, this report identifies multiple new and under-tapped segments of credit demand, which are distributed across loan product constructs, geographies, CIBIL score-based risk segments, end-use requirements, and borrower profiles.

The increased diversity in borrower profiles is indicated by the fact that, in 2020, 49% of first-time borrowers were less than 30 years old, 71% were based in non-metro locations, and 24% were women. Further, these profiles vary when analyzed at credit product level based on credit appetite, credit experience, credit discipline, and channel of consumption, and have made segmentation increasingly nuanced and complex. Underlining the report’s insights is the 2.5 times surge in searches for loans from non-tier-I cities than from tiered cities across 2017-2020. Overall, growth in searches for car loans between the two halves of 2020 grew the fastest at 55% with home loans following with 22% growth, according to the report.

With this rapid evolution in India’s financial ecosystem, lending decisions are now powered by data across parameters and dimensions. This evolution is driving investment by lenders in technology automation, machine-learning powered scorecards, and analytical models to rapidly scale sustainable business growth in today’s dynamic market.

Commenting on the findings of the report, Rajesh Kumar, the managing director and chief executive officer, TransUnion CIBIL, said: “We have collaborated with Google to combine the power of online credit-related search data with credit enquiry data from TransUnion CIBIL to create this rich research report which is a powerful reflection of consumer demand, intent and approach to accessing financial opportunities. Consumer credit demand and access has undergone a paradigm shift over the last few years, with the post-pandemic circumstances having further accelerated this change. We are excited about the potential of this partnership to help credit institutions and policy makers in strategizing for resurgence and growth in India’s emerging credit landscape."

Adding to these insights, Bhaskar Ramesh, director, Google India, said, “In India’s post covid-19 journey back to growth, access to credit is crucial. With more and more consumers now coming online, the demand for credit has also dispersed and moved outside of predictable demographic pockets. The traditional customer contact model is constrained in locating, reaching, and engaging these new customers, particularly those beyond tier-I cities. End-to-end tech-enablement by lenders to create digital paths of purchase for easy and timely disbursals is the need of the day."

The report identifies the significance of small ticket (up to 25,000) loans, characterized by searches for "phone on loan", "laptop on EMI", and "mahila loan 30000". The share of these loan disbursals among all personal loans has gone up from 10% in 2017 to 60% in 2020. With disbursal speed and convenience being the hallmarks of these loans, the digital-first sellers have the largest share in this category with 97% of all personal loans disbursed by them being under 25,000. Interestingly, small loan borrowers demonstrate higher loyalty with 42 times growth in repeat customer base among lenders in CY20 versus CY17. Moreover, this growth is as high as 64 times for digital-first lenders, that is fintech NBFCs (non-banking financial companies), indicating higher stickiness driven by convenience, over the same time period.

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